Facebook will sell $16 billion worth of equity to outside investors at $38 per share. Google, raised a relatively paltry $1.4 billion with it's IPO in 2004. This is the largest tech IPO of all time
Facebook, says its value is around $104 billion... although it only generated a billion dollars of profit last year. It boasts more than 900 million users who log in at least once every month
It is the third-largest IPO ever by a US company, right behind Visa and GM.
Institutional investors will gorge themselves today on inflated prices but are the shares overvalued?
Frankly, I think Facebook is way overvalued. Sure the stock has potential to continue going up once while the hype of this IPO continues.
Take for example the news that GM just scrapped a major advertising blitz of Facebook because the company felt that the site delivered “insufficient” results. GM has been spending $10 million annually on Facebook
The company feels it is worth $104 Billion, but conventional ad matrix's show investing advertising dollars on the site does not pay off!
I have a feeling targeted advertising is going to become a big thing on Facebook.